Subject: File No. S7-20-08
From: Nick Reeder

July 28, 2008

When I first heard about your emergency order I was pleased that you had acknowledged that naked short sales were an issue and a threat to a number of companies. On the other hand I was disappointed that you did not make this order market wide.

I have a few comments that I would like to make.

All Naked Shorting, by virtue of its dilutionary impact, is manipulative therefore all naked shorting is illegal. Market Maker exemptions should be monitored closely and those market makers that break the rules should have their exemption status removed. I am sure that the majority of market makers conduct their business according to the rules.